Palm Beach Gardens Networking Event

Cigar Networking Event
Date: March 31, 2009 (Tuesday)
Time: 5pm to 7pm
Location: Gardens Cigars 10967 N. Military Tr.
Palm Beach Gardens, FL
Cost: $10.00 (Good towards any purchase)
Come meet other local professionals in the area who appreciate a good quality Cigar in a relaxed networking event. Appetizers will be provided.
Pre-Register
Please Call Matthew Blum (561)294-3202
E-mail: MBlum@SchumacherAuto.com

You Have Come To The Realization That You Need Hard Money.. Now What?

As a Mortgage Broker who works with several Hard Money and Private Money Investors it seems my phone is ringing more than ever, with questions about this type of financing. (Which is a good thing) It just seems so many people who come to the realization that they need this type of financing really don't know what to ask or what to expect when inquiring for this type of financing.

Below is some basics that you should ask your Licensed Full-Time Mortgage Professional.

How many Hard Money / Private Money Investors do you work with?
When Was the Last Time you closed and funded one of these types of Loans
Are They Licensed?
How long have they been doing this type of Finance
Make sure you are upfront and disclose everything to your Mortgage Professional.. Trust me they will find out anyway.
Remember gone are the days of favors.. These loans are make sense loans.. not favors

Things To Watch Out For

During your first converstion if the person tells you total fee's and final rate. This means the person only work with 1 Hard Money person and can only offer you 1 product. Any true professional works with several companies and Private Investors. I know I have some companies that start off with as little as 2 points and rates that start at 11%. However, until I have a complete understanding and full application on the client the rate and programs are the last thing. These loans are all on a case by case situation. Their is NO FLAT Rate or Program.
If the person sounds like a Used Car Salesman on the phone... Guess what.. They probably are. Gone are the days of people slamming people into loans that are bad. If you get this feeling from the person you are speaking with RUN! With the Mortgage Industry the way it is now, more and more true Mortgage Professionals have entered into this form of lending.


Standard in The Industry

Application Fee. Yes believe it or not many Investors want what they call "Glue". Before they start doing all the paper work, title work, appraisal they want to make sure the client is very serious about the loan and will close. (I still have some Investors that do not require a application fee)
Points. Yes Points have an "S" on the end. Please keep in mind these are all high risk loans it just depends on how much risk. The Higher the Risk the Higher the rate and points.
Pre-Payment Penality. Now please speak to your Licensed Mortgage Professional and check with your state laws first. However, most of these type loans come with a Pre-Payment Penality. These companies want to ensure the most profit they can. ( I still have some Investors that Do Not Have a Pre-Pay)
Documentation. No this is not a typo! Know matter what you read and what people tell you the truth is a these Lenders/Investors DO NOT WANT YOUR PROPERTY PERIOD..... These are high risk loans and also high returns for the Investors. They make money when you pay. Now keep in mind if you can't provide documenation that is ok as well but as I stated before RISK = RATE.. The more information you can provide the better.

Exit Strategy. This is mostly for the investors. Be prepared to have an exit stragety on this loan/property. If you don't know what this means please consult your Mortgage Professional and also re-think being an Investor.
In closing, please remember if a deal sounds to go to be true in this type of lending, it probably is. Take my advice and RUN as fast as you can away. Before signing anthing make sure you fully understand what you are signing and commiting for.

Myths About Hard Money / Private Money

As a Licensed Mortgage Broker in South Florida (Palm Beach Gardens) I work with several wholesale Lenders from A+ Credit to those who have a few speed bumps along the way of life (as do most Brokers). With the market the way it is in Florida I have really expanded my product line on the Hard Money / Private money side. Since doing this, I have also found many clients and Realtors really have miss information on these type of loans now.

Myth 1:

Hard Money / Private Money Only Uses the Appraised Value and Not the Purchase Price

WRONG!

When the market was going crazy this was a true statement. Now with the market the way it is they use the purchase price. Lets face facts if the appraisal says $300,000 and your buying it for $200,000.. that is really what the value is. You will NOT BE getting a 100% financing using this type of Financing. Those days are gone..

Myth 2:

Credit is Not Looked At

WRONG!

Your credit is looked however, your score is not what is important on the credit report. They want to see your payment history. In the end it will show what your final rate will become

Myth 3:

Close in Under a Week

WRONG!

While this is really not impossible it is highly unlikely. If a complete file is submitted to a Hard Money / Private Money Investor than you it might be able to. However, be realistic. These Investors DO NOT WANT this property. They want you to make the payments. They all now more than ever really go through each file with a fine tooth comb. In the end they do close pretty quick from start to finish.

Myth 4:

My Loan is NOT a High Risk Loan

WRONG!

The bottom line is, if your loan was not a High Risk Loan then you would seek other financing options. This type of financing does not come cheap. Their is a cost to this money.

In closing, I hope I was able to clear up some myths about Hard Money / Private Money lending. If you seek this type of financing please make sure you are dealing with someone who is licensed and really has the knowledge and ability to close your loan. If someone promises you the moon and the stars... RUN!

Hard Money / Private Money 2nds (HELOC) are Back in Florida

Hard Money / Private Money Home Equity Lines of Credit

As a Mortgage Broker in Palm Beach Gardens, Florida (Northern Palm Beach County) I have found many of my clients looking for Home Equity Lines of Credit(HELOC) or just plane seconds because they have such a great first Mortgage. Recently, with all of the guideline changes and the market conditions going crazy it was almost impossible to get a first Mortgage let alone a second one. This is why I am so excited to have one of my Investors come back in the market with this product.

Minimum Loan Amount $25,000

No-Prepay

No-Prepay (worth writing that twice)

80% must be drawn at closing

No Proof of Income

Credit only as a guide

Independent Appraisal (not from Lender)

Closing can take place in as little as 5 days



If you have any questions please feel free to call or e-mail any time. (561)294-3202